Re: Viper Cancellation officially confirmed 3/31
Please read the NHTSA explanation below of how a manufacturer's CAFE computation is done and the penalty process. Unless I am misunderstanding the mathematics, the Viper does not have a very significant impact on the calculation. So, the other federal regulatory changes coming up in the future - and Dick Winkles confirmed that there are some coming up at our Mar a Lago meeting - must be of more significance in calculating the cost of updating the Viper and, consequently,any decision to keep it alive or kill it off. For instance, the 2009 Viper will have a different internal structure for the rear bumper per federal safety regs. I also heard that Nardelli and Press recently, within the past thirty days or so, asked SRT to come up with the numbers needed to make the changes to keep the Viper alive after 2010. This occurred after they both drove the car at speed and got out of the car with big smiles on their faces. I thought that this was a hopeful sign.
How is a manufacturer’s CAFE determined for a given model year?
A manufacturer’s CAFE is the fleet wide average fuel economy. Separate CAFE calculations are made for up to three potential fleets: domestic passenger cars, imported passenger cars and light trucks. The averaging method used is referred to as a “harmonic mean”. The regulatory language describes the calculation as: “the number of passenger automobiles manufactured by the manufacturer in a model year; divided by the sum of the fractions obtained by dividing the number of passenger automobiles of each model manufactured by the manufacturer in that model year by the fuel economy measured for that model.” The numerical example below illustrates the process. Assume that a hypothetical manufacturer produces four light truck models in 2004, where MPG means miles per gallon and GVWR means gross vehicle weight rating measured in lbs:
ModelMPGGVWRProduction Volume
Vehicle A
22
3000
130,000
Vehicle B
20
3500
120,000
Vehicle C
16
4000
100,000
Vehicle D
10
8900
40,000
Because the Vehicle D exceeds 8,500 GVWR, it is excluded from the calculation. Therefore, the manufacturer’s light truck CAFE is calculated as:
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=Average Light Truck Fleet Fuel Economy
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The 2004 model year light truck CAFE standard is 20.7 mpg therefore the manufacturer is not in compliance.
[SIZE=+1]What is the penalty for noncompliance for a given MY and how is it calculated?[/SIZE]
The current penalty for failing to meet CAFE standards is $5.50 per tenth of a MPG under the target value times the total volume of those vehicles manufactured for a given model year.
Since 1983, manufacturers have paid more than $590 million in CAFE civil penalties. Most European manufacturers regularly pay CAFE civil penalties ranging from less than $1 million to more than $20 million annually. Asian and most of the big domestic manufacturers have never paid a civil penalty.
For MY 2002, five imported passenger car fleets, including BMW, Daimler Chrysler, Fiat, Lotus and Porsche are projected to fail to meet the 27.5 mpg passenger car CAFE standard. In addition, two light truck fleets, including BMW and Volkswagen are projected to fail to meet the light truck CAFE standard of 20.7 mpg.
When NHTSA finds that a manufacturer is not in compliance, it notifies the manufacturer. Surplus credits generated from the three previous years can be used to make up the deficit. Using the example from above, the manufacturer may use credits from any of the previous three model years (2001, 2002, or 2003). Credits generated in the furthest out model year (2001) would be used first, followed by any generated in 2002 and finally 2003. If there are no (or not enough) credits available, then the manufacturer can either pay the fine, or submit a carry back plan to the agency. In the example, the hypothetical manufacturer’s CAFE was 19.27 mpg for model year 2004. In that year, the standard was 20.7 mpg. The fine is calculated as:
(20.7 - Average Fuel Economy)*10.0 * $5.50* Production Volume = Total Fine
(20.7- 19.27) *10.0* $5.50 * 350,000 = $27,527,500
If the manufacturer decides to make up the difference in the following three years instead, they must file a carry back plan with NHTSA. A carry back plan describes what the manufacturer plans to do in the following three model years (2005, 2006 and 2007) to make up the deficit credits. NHTSA must examine and approve the plan. The total number of credits that must be made up are:
(20.7 – Average Fuel Economy)*10.0 * Production Volume = Total Credits
(20.7 – 19.27) *10.0* 350,000 = 5,005,000
The manufacturer can make up deficit credits by producing a fleet of vehicles that exceeds the standard at that time. For example, suppose the manufacturer submits plans to build the following light trucks in 2005 model year:
ModelMPGGVWRProduction Volume
Vehicle A
22
3000
100,000
Vehicle B
20
3500
80,000
Vehicle D
10
8900
55,000
Vehicle E
25
2800
150,000
In this model year, the manufacturer has quit making one model (Vehicle C) and introduced a new model (Vehicle E). Because Vehicle D has a GVWR in excess of 8,500 lbs, it is excluded from the calculation. Therefore, the manufacturer’s CAFE is calculated as:
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= Average Fuel Economy
Since the light truck standard is 21.0 mpg in 2005, the manufacturer has exceeded the standard and generated excess credits:
(Average Fuel Economy –21.0) *10.0* Production Volume = Total Excess Credits
(22.69-21.0) *10.0* 330,000 = 5,577,000.
These excess credits generated in 2005 model year cover the deficit from the 2004 model year with a surplus of 572,000 that can be used in later model years.
It's been pretty quiet regarding registration. A quote from the VOI announcement, "
